airline loyalty programs

Airline loyalty program changes

Airplane stunt

 

Early boarding privileges, waived checked bag fees, free flights and upgrades from the back of the plane to the front are just some of the benefits air travelers have come to expect from airline loyalty programs.

Program changes rolled out in 2015 by some major U.S. carriers (notably Delta and United) made attaining the status needed to earn those perks much harder to achieve and experts say in 2016 travelers should expect more of the same.

The news isn’t all bad. Some airlines, most notably Alaska and Hawaiian, continue to award points based on miles flown. Others are adding new benefits for elite members and adding more ways for members to spend banked miles they can’t use in the air.

Here’s a rundown of some changes, new offerings and tips on getting the most of your miles this year.

Alaska Airlines

Sometime in “late 2016” Alaska Airlines will introduce a Premium Class section, which will offer fliers more legroom and some additional perks, including complimentary seating in this new section for elite Mileage Plan members.

American Airlines

“The biggest changes that will affect the most members will probably be award chart changes in March and changing to a revenue-based program by the end of the year,” said American Airlines spokeswoman Laura Nedbal.

Details about the changes are outlined in this release from November, 2015, but Brian Kelly, of The PointsGuy.com, encourages anyone with banked miles in American’s AAdvantage program to spend them on award tickets by March 21.

“That’s when they’re changing the rates and, after that, in most markets you’ll end up needing more miles for an award ticket. In some cases the hike is 80 percent,” said Kelly.

American’s award tickets are good for one year from the date of issue, but Kelly notes you can change your day of travel later as long as you’ll be flying the same route.

Delta Air Lines

According to Delta Airs Lines spokesman Anthony Black, for 2016 Delta has added more international partners for SkyMiles redemptions, expanded its award pricing (lowered prices for some markets; raised costs in others), and is rolling out a program that allows Delta Sky Club Lounge visitors to pay for drinks with SkyMiles.

Some mileage program aficionados aren’t all that pleased with some of the tweaks Delta has been making to its SkyMiles program.

“Right now their system isn’t very consumer-friendly,” said Kelly, “They’ve made it so you can’t just see how many miles you need for a trip and start saving. The goal posts seem to keep changing.”

JetBlue

In 2016, JetBlue will be giving elite TrueBlue Mosaic members complimentary alcoholic beverages onboard and reduced pricing to redeem points for Even More Space seats, according to airline spokeswoman Tamara Young

United Airlines

For 2016, United Airlines is “sweetening the premier qualification bonus for first and business class fares,” said airlines spokesman Rahsaan Johnson, and bringing forward some member benefits it started rolling out late last year, including complimentary beer and wine for 1Ks sitting in Economy.

MileagePlus program members may now also use award miles to pay for in-flight Wi-Fi and buy gifts, electronics and travel essentials at the Miles Shop in United’s Terminal C and Newark Liberty International Airport.
The end of airline loyalty programs? Not quite yet.

Bar-raising changes, point and mileage devaluations and other complicated modifications to airline mileage programs won’t likely make airline loyalty programs more popular with the 65 million U.S. fliers who are members of these programs.

While nearly one third (32 percent) are “mid-tier” members, only 4 percent say they have achieved elite status, said Doug Quinby, Vice President, Research for Phocuswright, and “nearly half (49 percent) have not accrued enough miles to earn any benefits.”
Benefits or not, “loyalty does breed repeat business,” said Quinby.

(My story about airline loyalty program changes first appeared on CNBC.com in a slightly different form.)

Travel tune-up: re-thinking airline loyalty programs

Photo from UW Digital Collections, via The Commons on Flickr

Photo from UW Digital Collections, via The Commons on Flickr

About 25 million people had plans to travel by air this Thanksgiving weekend and, as they return from their holiday, some are already making travel plans for 2015 using the frequent flier miles they earned from airline loyalty programs this past year.

But changes in some of those programs might make some travelers rethink their allegiances now.

Alaska Airlines will begin offering increased mileage bonuses for a number of fare classes and elite Mileage Plan members. Starting January 1, the airline will be offering big mileage bonuses to first class, refundable coach and MVP Gold upgradeable travelers.

Both Delta Air Lines and United Airlines are joining the fray by upping the antes for flight miles and elite programs, through a mix of cash spend and frequent flier miles.

Beginning January 1, 2015 the cash spend required for reaching various levels of Premier status on United Airlines in 2016 will be raised. And starting March, 2015, United passengers will earn award Mileage Plus frequent flier miles based on an equation that takes into consideration ticket price and frequent flier status instead of actual miles flown.

As of January 1, 2015, Delta Air Lines SkyMiles members will earn miles based on ticket price and elite program status as well and, as these charts outline, the cash spend for reaching for reaching various Medallion levels is increased as well.

Various websites (many of which earn commissions from promoting mileage-linked credit cards) parse the minutiae of the airline mileage rules but “come next February, I think a lot of people are going to drop status because of these changes,” said Brian Kelly, founder of ThePointsGuy.com. “Even though they may have flown the same amount as the year before, they most likely won’t hit the revenue requirements.”

It may be more difficult to accrue elite status, but United and Delta have still rolled out some helpful all-access perks.

In August, Delta introduced Delta Studio, which offers movies, TV episodes, music, games and other free entertainment options on all of its domestic aircraft and two-cabin regional jets.

Just this week, United expanded its free on-board wireless video streaming to Android devices, and will also offer bonus mileage incentives to smartphone app users via MileagePlus X.

And, as part of a major make-over underway at United’s hub at Newark Liberty’s Terminal C, passengers will be able to use Mileage Plus award miles to pay for purchases in restaurants and stores via the 6,000 iPads OTG Management is installing as part of the project.

In the second quarter of 2015, American Airlines’ AAdvantage and US Airways Dividend Miles members will become part of the same frequent flyer program.

Mileage balances will be combined, elite levels will be aligned and a new upgrade policy for elite status members flying on American and US Airways will be put in place.

Do you want to check luggage with that ticket?

In the first half of 2015, JetBlue will launch a three-tiered flyer program that will allow some passengers to get up to two pieces of luggage checked for free, along with other incentives.

Meanwhile, Hawaiian Airlines will offer its travelers the option of earning travel miles “based on distance flown, not based on ticket spend and Elite status,” spokeswoman Alison Croyle told CNBC. “The airline will also not require any minimum spend to make elite status.”

Based on the host of incentives and upcoming changes, airline watchers say passengers need to decide whether certain loyalty programs are worth keeping.

Elite status is becoming harder to earn and less valuable, at least at the mid and lower tiers,” said ThePointsGuy’s Kelly.

“So you need to identify what you want out of your program,” he added. “Calculate how much extra you pay for your loyalty and see if you’re receiving more than that back in perks and the value from miles. If not, then it may be time to switch.”

(My story about airline loyalty programs first appeared on CNBC in a slightly different version.)